Get a Loan One Day Out of Foreclosure!

A local Las Vegas lender is thinking outside the box with three brand new loan programs for Nevada home buyers! These mortgages are truly unique and no other lender is offering them.

1. Fresh Start Program - One day out of foreclosure or short sale with 20% down payment! If you've been told before that you had to wait one to seven years to purchase a home, wait no more. This program is designed for owner occupants only, and the interest rates are outstanding.
2. 5% Down Jumbo Loan Program - This program is designed for owner occupants, but vacation home buyers can also get in on it with 10% down.
3. 5% Down High Rise Loans - No other lender in Nevada has 5% down mortgages for high rise condos. The 5% down program is for owner occupants, but second home buyers can also purchase a high rise with 10% down.
4. 5% Down "Unwarrantable Condo Loans - most residential condos in Las Vegas cannot be financed because of owner occupant to renter ratios. This has put a real damper on condo sales over the past 7 years. Now owner occupants can buy a condo with as little as 5% down in any project that does not have structural litigation, opening up a whole world of possibilities instead of just a handful. And second home owners can have the same opportunity with 10% down.

For more details on each of these exciting new loans, go to New Nevada Mortgage Loan Programs. Or call 702-985-7654.

These programs are only for properties purchased inside the state of Nevada by US citizens.

Still can't qualify quite yet but want to buy a home? Try private money mortgages. The interest rate is high, but over the long term it may be much cheaper than the price increases the Las Vegas Valley has been experiencing.

Tired of Losing out to Cash Buyers?

Tired of losing out to cash buyers on the Las Vegas homes of your dreams? You must get completely pre-approved for a loan before submitting an offer, and you must be able to close quickly once that offer has been submitted. So we found a mortgage lender who could help our clients compete in multiple offer situations.

Southern Fidelity Mortgage, one of the Tonnesen Team Preferred Lenders, wants to earn your business and help you compete with all cash offers. They will guarantee:

1. They will be ready to fund and close any loan within 15 days. Just submit your completed loan application with required documentation and then go house hunting with one of our experienced real estate agents. When you can close as fast as a cash offer, you have a much better chance to get your contract accepted in multiple offer situations. Banks consider preapproved financed purchase offers with two week closes to be as strong as cash offers. 
2. Lowest rates and fees in town! Southern Fidelity guarantees to meet or beat any legitimate loan quote, so you can save money AND qualify for a higher loan amount. 
3. The best customer service around. After your loan closes, you will be asked to complete a short survey on your customer experience. Your lending team only gets a bonus if YOU are a happy customer!

Just go to: Las Vegas Mortgage Loan Application and fill out a short pre-application form, and one of Southern Fidelity’s loan officers will get back to you within 24 hours to put together your mortgage game plan.

When is the Best Time to Close on a Las Vegas Home?

By guest blogger Jamie Cailor

We all have probably heard that it is better to close Las Vegas real estate transactions at the end of the month as opposed to mid-month or early on in the month. In fact, many borrowers are under the mistaken impression that they can save money on interest if they close later in the month.

Closings are more often scheduled for the end of the month than any other time for two reasons:

1. An offer to close by month end is more attractive to the seller as it “saves him” having to pay another mortgage payment out of pocket.
2. From the buyer’s perspective, it reduces the amount of cash needed to close in prepaid interest.

In realty, no one is actually saving any money. Las Vegas mortgage interest is paid in arrears – in other words, after you have used the money. The seller will still owe the interest from the previous month, but instead of writing a check, the amount will be deducted from his proceeds. The buyer will still be paying the interest for every day he has the loan, he just doesn’t need as much money up front. So total cost is not so much the issue as having the out of pocket cash to meet the requirements to close.

What is prepaid interest anyway? Well, prepaid interest is essentially the amount of interest due at closing to cover the period of time in the month between the date the mortgage lender closes your loan and the date your first payment is due. Say you close your loan on October 1st, paying 30 days of prepaid interest at closing. While you’ll have to pay that interest upfront, your first mortgage payment won’t be due until December 1st.

However, if you close on October 30th, and pay only one day of prepaid interest, your first mortgage payment will be due December 1st, so that first full mortgage payment will come due sooner. Either way the same amount of interest will be paid - it’s just a matter of when you pay it. But the difference in closing costs can be significant for first time home buyers strapped for cash to get into their new Las Vegas homes. So many homeowners opt to close at the end of the month to reduce their upfront closing costs.

Smart mortgage brokers will typically disclose enough prepaid interest for 15 days or more on the Good Faith Estimate to ensure borrowers have enough money to cover the costs no matter what day the loan actually closes. It’s not always easy to time a closing as “life happens,” so it’s better to overestimate, especially if you’re cutting it close with limited funds. The last thing a borrower needs is to be short on funds at the tail-end of the funding process.

And there are definite disadvantages to closing at the end of the month too. This is always a frantic time for title, escrow companies and lenders, as more than 60% of all contracts are written to close between the 25th and the 31st of each month. But there is NO guarantee that the loan will actually close at that time, and you may be out the prepaid interest anyway. Too many things can happen that delay an escrow. The homeowner’s association doesn’t submit the payoffs for the previous owner in a timely manner, the underwriter asks for more conditions at the last minute, there are mistakes on the final loan documents that need to be corrected, a Las Vegas foreclosure property might not receive final HUD signoff, the title company finds a lien or judgment has just been filed… The list can go on and on. In addition to that, other service providers, like moving companies, rental trucks and even utility companies are also jammed at the end of each month, and you may find it difficult to get the services you need.

On the other hand, if you plan your funds in advance and can close early in the month or mid-month, you’ll have a lot more time devoted to your loan documents and closing packages and it may be cheaper to rent that moving van. Plus even if something happens at the last minute that could cause a delay, the escrow officers and lenders will have more time to expedite your transaction as much as humanly possible.

All that said, perhaps you shouldn’t be looking at Las Vegas homes for sale if the amount of prepaid interest can make or break you. So be sure you have sufficient funds regardless of whenever you close your loan.

MGM City Center Expected to Reduce Prices

MGM CityCenter, MGM Mirage’s 8.5 billion dollar showcase property in the heart of the Las Vegas Strip, announced earlier this month that it was likely they would be adjusting the prices downward on the three residential developments in the mixed use project: Veer, Vdara and The Mandarin Oriental. Reductions are being considered in the wake of the world’s economic recession and the local Las Vegas real estate market depreciation of up to 50% on residential properties.

MGM opened sales at the CityCenter in January 2007, when the Las Vegas real estate market was red hot. Original purchasers have been seeking price reductions on the condominiums and condo hotel units they purchased two years ago, during the height of the Las Vegas boom. According to Bob Hamrick, CityCenter’s Sales Manager, “CityCenter remains a unique product that can’t be touched by anything else in Las Vegas. But there are some realities we recognize, and we have to respond.” Any announced price reductions would be offered to original contract holders and to buyers purchasing between now and when the official price reductions are announced in early September of 2009. Rumors are flying that reductions could be anywhere between 20% and 40%.

MGM is also trying to find sources of private financing to help buyers close on their condos. With tighter federal guidelines and banks struggling under a glut of foreclosures, high rise and condo hotel loan programs from Las Vegas mortgage lenders have all but vanished, The few that remain are requiring 50% to 60% down payments and higher interest rates. The Mandarin Hotel is expected to start closing on luxury residential units in December of 2009. Units at Veer, the twin residential towers fronting the CityCenter complex, are expected to begin closing in January of 2010, and condo hotel units at Vdara are expected begin closing if February of 2009.

The next big question is not only how much of a reduction will be offered to MGM CityCenter buyers, but also how the reductions will affect the future of the Cosmopolitan Hotel and Casino next door. The Cosmopolitan, a condo hotel and hotel casino project, was taken over through foreclosure by Deutsche Bank last year, and sales were suspended. There are almost 2,000 current contract holders in the Cosmopolitan that are waiting to hear if the project will move forward with the proposed condo hotel program, or if the contracts will be voided and the units absorbed into the hotel room inventory. Sales in the Cosmopolitan commenced on February 14th in 2005, with over 900 units being reserved the first day in a record breaking frenzy.

Elsewhere on the Las Vegas Strip, real estate investors are snapping up units at fire sale prices in the beleaguered MGM Signature project. Owners of condo hotel units that originally sold from $400k to over $1M have become part of the Las Vegas foreclosures statistics due to high mortgage payments, declining values, and rental incomes below expectations. Current purchasers are taking advantage of prices starting in the mid $100s, or 33 cents on the dollar. Trump Tower is experiencing the same hardship, and there are some real bargains to be had on resale units. The Palms Place luxury condo hotel units, on the other hand, have fared much better due to high occupancy rates in the popular boutique venue. And in general, Las Vegas homes for sale inventories are way down from the same time last year as first time buyers and investors are drawn back into the market by affordable pricing.

Multiple Offers On Las Vegas Properties Again

Dear Readers,

Below is a letter that I sent last night to an Australian agent who has clients that want to buy Las Vegas real estate. I had sent her some "best buy" Las Vegas MLS listings two weeks prior and her clients were supposed to respond immediately. But they procrastinated and lost out on the home they wanted. I realized as I was writing my response, that it was a great lesson in timeliness and patience for any buyer that is looking to purchase in this crazy market.

Hey Jo,

Where you been, girl?! The property your clients chose already has a contract on it – actually they had multiple offers. It sold for cash above the most recent list price, and is due to close this Friday.

We are experiencing a HUGE surge in buying. You know the frustrating experiences you already had trying to put in offers? Well just in the past couple of weeks our market has gone officially insane. Everything decent under $150k is now getting multiple offers within a couple of days and averaging 3% above list price. By the end of March we had 80% more sales than last year at this time!

The listing agents won’t even present an offer now unless it is accompanied by either proof of funds for cash buyers (in the form of a current bank statement) or full loan approval for buyers getting Las Vegas mortgages. The banks don’t even care if the buyers are cash or getting loans – they are only looking at the bottom line since the mortgage buyers are fully approved anyway.

And just to make it even tougher, some of the REO listing agents are playing games with the offers and trying to sell them “in house.” Not what you wanted to hear, I know.

But we have so much pent up demand from first time home buyers: prices are affordable for the first time in years and our federal government passed a tremendous first time homebuyer tax credit. Plus the news is starting to report Las Vegas as one of the most undervalued markets again, so here come the investors once more!

I am right on the spot, and in order to get two properties in escrow for myself this week I had my offers out to the listing agents within hours of the properties going on the market, sight unseen. We actually bid on five Las Vegas homes to get two. They are both short sales, so I still have to wait for the banks to approve the shorts on the loans. (Oh, yes, I am definitely in buying mode myself. I really think we have hit bottom and will start to see a rise again by year’s end. Personal opinion, of course, but it feels right to me based on what I am seeing in the market.) One of the properties I bid on got THIRTY offers!

Anyway, long story short (too late!), first of all your buyers would have to send us their proof of funds in advance, and second they have to be ready to pounce immediately. Literally: we send you the homes, they pick at least two or three to put offers on within just a few hours and then email us back right away so we can prepare contracts. (ALL the banks have counter offer addendums, so the clients won’t ever have to worry about being on the hook for more than one property. If we got lucky enough to get a positive response from more than one, we would just pick the one we liked the best and reject the counter on the other.)

We email back the contracts along with the comparable sales info on the properties they have chosen so that your clients can feel totally confident that they are paying a reasonable price. They sign the contracts and send them back, and then we “present and pray.” We will already be working with a time zone challenge, and really only have perhaps 72 hours between the property going on the market (or having a significant price reduction to below market value) to offer presentation to be effective. And that’s because we truly are sending you the BEST listings.

The buyers should also be prepared to wire funds within one business day to the escrow company to cover the earnest deposit if they get an accepted offer. Very few properties will be completely turn-key – some handy work will probably be required, though there are enough that just require basic cosmetics. (Touch up paint, landscape maintenance, carpet cleaning, etc.) Remember, the lowest priced properties are all Las Vegas foreclosures (bank owned) or Las Vegas short sales - the banks are not making any repairs and are selling “as is, where is.” And most of the original owners were not all that happy about moving out.

If your buyers are truly serious about proceeding, we should get their current proof of funds first off. Then they need to commit to responding with a couple of properties they are willing to purchase within a short (few hours) time frame so that we can prepare contracts. And they need to know that they are probably going to have to bid over list price unless the comparable sales data indicates otherwise. Low balling worked when prices were higher and no one was buying. Now everyone is back in the game again.

Deep breath!! Did I put you to sleep with this novella? I don’t want to discourage your buyers, but unless they are prepared to be really aggressive it’s going to be hard to get them something good.

Cheers and looking forward to hearing back from you - quickly!
Diann

PS When I speak of Las Vegas real estate, that also includes Henderson real estate. It is a small valley and they run right into each other. Also, if your clients do want to go higher in pricing, there are some dynamite deals in some of our gorgeous Las Vegas golf course homes too!

Las Vegas Homes - Allowable Seller Concessions

How much can you ask the seller to pay on your behalf when purchasing Las Vegas homes for sale? The seller can actually contribute up to 9% in closing costs on a conventional loan if the you are putting up a large down payment! Below are the current allowable costs that the seller can pay on behalf of the borrower depending on which kind of loan the borrower is obtaining and the total down payment.

1. When it is an FHA loan, sellers can give up to 6% of the sales price towards buyer’s closing costs.
2. When it is a VA loan, sellers can give up to 6% of the sales price towards buyer’s closing costs depending on how the contract is written.
3. When it is a conventional loan on a primary residence or 2nd home the seller can give up to 3% of the sales price towards buyer’s closing costs if the buyer is putting 10% or less down.
4. When it is a conventional loan on a primary residence or 2nd home the seller can give up to 6% of the sales price towards buyer’s closing costs if the buyer is putting 10-25% down
5. When it is a conventional loan on a primary residence or 2second home, the seller can give up to 9% of the sales price towards buyer’s closing costs if the buyer is putting more than 25% down
6. If you have an investor purchasing a home, the maximum seller contribution is 2% of the sales price.

With the Las Vegas real estate market heating up and all the fantastic deals on Las Vegas foreclosures that are currently on the market, not only can we find some great buys, we can use these seller concessions to buy down the interest rates as well. Call our office now at 702-985-7654 to get prequalified for a mortgage and see how much money you can save on your closing costs.

Financing for Foreign Investors Discontinued

Once again the mortgage lending guidelines have changed with the wind. For a brief period there was a window for foreign nationals to obtain mortgage financing on investment and second homes in the United States with down payments as low as 25%, but now that window has been slammed shut along with a host of other “make sense” loan programs. (Don’t even get me started on condo hotels that can’t be financed by anyone with even 50% down!)

Many of the foreign nationals who contacted us in recent weeks were willing to put down as much as 30% to 40% or even 50% on Las Vegas foreclosures. With the current housing market crunch, what are the big banks thinking? Here are people with real money, good credit and big down payments that would love to take advantage of lower prices and they can’t get financed?!!! Some of these investors were already under contract on projects in development, and they may have to walk away from substantial deposits unless alternative financing is brought online. (Just as a side note, permanent resident aliens are still able to obtain financing on the same terms as US citizens. If you are a permanent resident alien and need a Las Vegas mortgage, please contact us at 702-985-7654 so we can put you in touch with the right lender.)

On top of all this, with the stock market dives globally, even those foreign investors who didn’t need financing and were planning on paying all cash are now stepping back as they watch the value of their portfolios diminish. The Euro is back down to 2005 levels and the British pound has plummeted even below that level.

Canadians, who saw their dollar rise to all an all time high against US currency at $1.10, have watched it tumble in just the past few days to 79 cents versus the US dollar. Literally thousands of Canadians were looking for winter getaways in the US, but have had to put their plans on hold. Again, many of these were all cash buyers looking for modest Las Vegas condos under $100k, but with the devaluation of their dollar they have once again been priced out of the market without financing.

And even US citizens are being crunched/punished in the mortgage marketplace. The latest is that anyone who has three or more properties with any kind of mortgage on them cannot get financing for a fourth property. Again, even if they are willing to put 50% down and have low loan to value ratios on their existing properties and excellent credit and income, they still can’t get a fourth loan. Not even if you’re Donald Trump.

With all the resale Las Vegas homes and condos for sale, not to mention the hundreds of thousands nationwide, and all the opportunities to pick up great deals on foreclosures, our banks are not willing to lend to these impeccable buyers who want to buy and have money. Certainly I am not suggesting we should go back to no or low money down programs with no income or asset verifications. But why not create some solid loan programs to entice these good buyers, whether or not they are citizens of the US? The banks would be able to lower their inventories of properties substantially, which would in turn stimulate the economy and gradually raise prices again in a controlled manner.

All I know is that in the months to come, those with cash who are willing to take a chance on the market now are probably going to come up looking like geniuses in couple of years. My other prediction is that while Las Vegas real estate was one of the first to fall, it will also be one of the first to recover, and I am personally putting my money where my mouth is.